According to statistics released by the Administrative Office of the U.S. Courts, annual bankruptcy filings totaled 517,308 in the year ending December 2024, compared with 452,990 cases in the previous year.
Bankruptcy is designed to provide relief to individuals or businesses that are unable to repay their debts. According to attorney Christopher M. Kerney, most people file for bankruptcy when a home is going into a foreclosure sale, wages are being garnished, or maybe threatening collector phone calls are being received.
A bankruptcy lawyer can help you get back on track if you can’t pay your bills, if creditors are calling you all the time, or if you don’t know what your financial future holds.
This article will discuss the scenarios where it would be beneficial to have a bankruptcy lawyer.
Understanding Bankruptcy: Types and Processes
Bankruptcy laws manifest in various shapes and forms. Choosing the right one will offer you a chance to regain your job or financial life.
A chapter 7 bankruptcy can make your personal debt go away. Meanwhile, a chapter 13 bankruptcy grants you the opportunity to preserve your properties while paying your debts over three to five years through a court-approved plan.
Several things can lead to bankruptcy, including economic downturns, bad money management, or having too much debt. Business lawsuits can cause the company to go bankrupt. For example, when a business owner is sued for alleged money owed by it to a former employee or a customer or for an alleged injury suffered on its property, the legal expenses can put a significant strain on the company’s finances. Mckinney, TX, business attorney Jana Yocom Rine says business disputes can occur in any aspect of a company’s activities, relationships, agreements or interactions.
Suing a business more than once can also lead to this outcome. The court fees and settlements can be costly, and the business may eventually go bankrupt.
The bankruptcy lawyer will help you sort through the details to find the best option for you.
Assessing Your Financial Situation
Never consider bankruptcy without a thorough review of your economic capacity. Get into the habit of collecting every piece of financial document available. Your documentation should include bills, bank statements, or income information.
Identify all income sources for the household for a single month versus all expense items per month. This information will help you track where most of your money goes and whether you are overspending.
List down what you owe, including amounts, interest rates, and payment due dates. It is critical to know your entire financial commitment.
Take stock of your assets also, as they might come into play during bankruptcy proceedings. Establishing a clear financial overview of your assets helps you to determine your options and whether bankruptcy is really the right thing for you.
The Role of a Bankruptcy Attorney in Your Case
A bankruptcy lawyer helps you understand your alternatives and when to exercise your rights. They may assess your finances and recommend a solution.
Your lawyer will provide the necessary paperwork, write the bankruptcy case, and help you file a case. They will also go to court for you and let you ask them anything that worries you.
Avoid options that could harm your case without your lawyer’s knowledge. For whatever reason, they will bring comfort and support to a tough situation. Regaining control of your finances depends on finding the right lawyer who knows what they’re doing.
Bankruptcy Process With Legal Support
Going through bankruptcy is difficult. Hiring a lawyer can address this challenge and make undergoing the legal process smoother. Investing in a lawyer helps you better understand your choices. Their legal support assures you that you make the right choice at every stage of the legal process.
An attorney will do the legal paperwork on your behalf. They can fill out petition forms and see to it that they are filed properly. Working with a knowledgeable lawyer can prevent you from committing unnecessary mistakes that could hurt your case.
The same person will appear for you at meetings and negotiations, advocating for your interests before the court. All answers to your questions can be provided by your lawyer. Their presence will help you feel better throughout your case.
Life After Bankruptcy: Rebuilding Your Financial Future
Bankruptcy gives you a fresh start to fix your financial situation. It allows you to rebuild credit and plan your finances by means of positive steps.
Start budgeting for daily necessities and allow for some savings. You could even get a secured card, use it wisely, and slowly build up credit. Make payments on time and keep your balance low.
Get informed about personal finance so that future important decisions can be made with much better knowledge.
Other professionals may also help you, including a financial adviser or a bankruptcy lawyer.
